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The company was founded in Vancouver, British Columbia, Canada in 1999 by Lance Tracey and Mark Teolis.[4] From the beginning, the co-founders targeted small- and medium-sized business customers.[4]

In 2004, the company acquired ServerBeach, a dedicated hosting provider located in San Antonio, Texas, for $US 7.5 million. ServerBeach had been started by Richard Yoo, who had served as the CEO of Peer 1 Hosting competitor Rackspace, who returned to RackSpace after the acquisition.[5] ServerBeach was the host for video hosting company, YouTube, which as it expanded powered expansion of the data centre. After YouTube was acquired by Google, the operations were migrated to Google data centers.[6]

In 2007, the company introduced an incubation program, that combined discounted hosting services with consulting assistants.[7] In 2010, the company built a new energy-efficient and green data center located just outside Toronto [6][8] which was followed by opening in November 4, 2011 of another green 58,000 sq. ft. data center located in Portsmouth, Hampshire, UK.[9][10]

To provide Internet users with a visual perspective into online traffic flows, the company developed a graphical "Map of the Internet" that depicts the layout of all the networks that connect to form the Internet.[11][11][12][12][13][13] Much of the data was collected from the Cooperative Association for Internet Data Analysis (CAIDA). The image shows a graph of 19,869 autonomous systems, joined by 44,344 connections.[11][12][13] In 2013, the company launched an interactive mobile app version.[14]